Pay More At The Pump, Gas Tax Goes Up Jan. 1

Pay More At The Pump, Gas Tax Goes Up Jan. 1

December 29, 1992|By SUSAN E. KINSMAN; Courant Staff Writer

Connecticut motorists pay more for gasoline than those of any other state in the continental United States -- and they're probably going to pay even more after Jan. 1, when the state tax on gasoline goes up.

The state excise tax on gasoline is going up by 2 cents, to 28 cents a gallon, Jan. 1. That increase promises to boost average pump prices, which the Automobile Club of Hartford says are below only those of Hawaii.

And the Jan. 1 increase won't be the last in Connecticut.

Current tax schedules call for a 1-cent increase every six months until the state's excise tax on gasoline reaches 34 cents a gallon Jan. 1, 1996. The tax on gasahol will increase similarly, reaching 33 cents a gallon by July 1, 1996.

The money is being used to help pay for the state's ongoing road and bridgerepair program.

All states collect the 14.1-cent-a-gallon federal excise tax on gasoline. But state taxes are the primary reason why Connecticut gasoline prices are so high, said spokesmen for major oil companies and local retailers.

Connecticut gasoline prices average $1.42 a gallon, based on the auto club's survey of full and selfservice prices for regular, midgrade and premium gasoline at 30 area stations earlier this month.

The average price in Hawaii is $1.60 a gallon, according to a survey by the American Automobile Association.

"Taxes undoubtedly are a major part," said Thomas H. Fitzpatrick, executive director of the Connecticut Petroleum Council, the local affiliate of the American Petroleum Institute, which represents the nation's major oil companies.

The Jan. 1 increase will make Connecticut's excise tax the nation's highest, pushing it above Rhode Island's, which had shared the top spot with Connecticut at 26 cents a gallon, according to the petroleum institute's latest survey May 1.

In addition, companies that distribute gasoline in Connecticut

pay a 5 percent gross receipts tax, which adds to wholesale and ultimately retail prices. Other factors that make prices higher in the state are the state's distance from gasoline refineries, the high cost of land, labor and local property taxes and the required use of cleaner fuels in some parts of the state, Fitzgerald said.

To reduce winter air pollution, stations in the Hartford area were required on Nov. 1 to begin selling socalled oxygenated fuels. "We expected prices to go up as high as 5 cents a gallon. But we didn't see that. Prices went up on average 2 to 2.5 cents" because of the new clean air requirement, said Lynn Davies, automobile club spokeswoman.

Massachusetts, however, does not have the same requirement. Together with the disparity in gasoline taxes between Connecticut and Massachusetts, "it is particularly tough for service stations along the border," Fitzgerald said.

In other states additional state, county or municipal taxes may be imposed on gasoline.

Charles R. Matties of West Hartford is president of the Service Station Dealers of Connecticut, an association of 150 stations in the Greater Hartford area.

"Tax increases always have an impact, particularly when they follow higher prices for oxygenated fuels," Matties said. The Jan. 1 change will "push a few more customers to at least buy [elsewhere] when it is more convenient," he said.

"It is not only discouraging, it hurts revenue. The profit margin on gasoline over the last several months has been so poor, most dealers have absorbed any increase," Matties said. But the tax increase means retailers will have to pay the state an additional 2 cents a gallon for everything they have in inventory.

"We have very little wiggling room," he said.

The good news for Connecticut consumers is that gasoline supplies are plentiful and that prices, not including the tax increases, are little changed from the same time last year, Davies said